As long as you meet your reinvestment requirements it doesn't matter how you allocate the proceeds.Now (now not needed) In your case if you"re selling for $800k (after closing costs and commissions) and maybe you decide you would like to purchase two properties for $400k.

Then no matter how you did it, you'll have an answer for the judge. 

Rent really, really is miserable in this area, unfortunately, but it's only a matter of time before it'll be better situated.

Of course, with all things, the answers to all these matters will depend on the circumstances.California tends to have more laws on the books and requirements and restrictions that it can be a good idea to form a CA LLC for out of state property so that you as a CA resident are covered, and to try to have your contracts fall under the purview of CA courts.

Design matters!

I'm sure at this point they know what a stellar deal they are getting, its only a matter of time before the rent rises. 

You need some sort of subject matter expertise.

Below are estimates of the housing shortage by different institutions:The National Association of Home Builders (NAHB) estimates a shortage of 1.5 million units (2021 data).Freddie Mac’s estimate is a 3.8 million unit shortfall (Q2 2020 data).A report commissioned by the National Association of Realtors (NAR) (2021 - Rosen Consulting Group) suggests a 5.5 million unit housing shortage.No matter which data source you choose, there is a massive shortage.

It greatly matters.

Here is my take.If you are good with being persistent, this will be key in your future success with land or any other real estate venture for that matter.